19290405_Minutes.pdf

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Upon call of the Governor, a special meeting of the Federal Reserve Board

waB held in the office of the Federal Reserve Board on Friday, April 5, 1929 at

3:00 o'clock.

PRESENT: Governor YoungMr. PlattMr. HamlinMr. JamesMr. CunninghamMr. McClelland, Asst. Secretary

The minutes of the meetings of the Federal Reserve Board held on April

311 and 4th were read and approved.

Telegrams dated April 5th from the Secretary of the Federal Reserve Bank

°t Cleveland, and April 3rd from the Chairman of the Federal Reserve Bank of

St , Low s1 advising that their boards of directors at meetings on the dates

/stated made no changes in the banks' existing schedules of rates of discount

44a parchase.

Without objection, noted with

approval.

Telegram dated April 4th from the Chairman of the Federal Reserve Bank

Of Sen Francisco, advising that the board of directors at a meeting on that

4414414de no change in the bank's existing schedule of rates of discount and

Parcusee

Noted, with approval, Mx. Platt

voting "no".

Letter dated April 4th from the Secretary of the Federal Reserve Bank

or York, advising that the board of directors at its meeting on that date

441 11° change in the bank's existing schedule of rates for purchases of accept-

44441 the letter quoting, however, the following resolution adopted by the

(1114setora with respect to the discount rate of the beak:

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"VOTED subject to review and determination of theFederal Reserve Board, to establish a rate of six percent for all rediscounts and advances, effective fromthe opening of business on April 5, 1929 and. until fur-ther notice and supersedin the existing rate but withthe understanding that this action of the board of di-rectors of this bank is predicated upon approval or dis-approval by the Federal Reserve Board today."

Noted.

In connection with the above letter, the Governorreported that Deputy Governor Case of the New York bankadvised him that the directors agreed upon a statementsetting forth their reasons for establishing a rate of6% yesterday, which is being mailed to the Board.

Letter dated April 4th from the Chairman of the Federal Reserve Bank of

BtIst°7a, quoting the following resolution adopted by the Executive Committee

Of the bank at its meeting on that date:

"VOTED that, subject to review and determination ofthe Federal Reserve Board, a discount rate of 6% on all

classes of paper of all maturities be and is hereby es-tablished for this bank, provided however that if theFederal Reserve Board's determination of the change inthe rate shall not have been obtained by the close ofbusiness on April 10, the action hereby taken shall be

considered rescinded and the proposed rate shall not beestablished without further consideration by the board of

directors or the Executive Committee of this bank."

Noted.

Letter dated April 1st from the Treasurer of the United States, advising

thatno applications were received from National banks during the quarter

eill'ea March 31st for the sale of bonds under Section 18 of the Federal Reserve

Act,

Noted.

Letter dated April 4th from the Comptroller of the Currency, advising

thatMrs. E. L. Todd, appointed Yoney Counter in the Federal deserve Issue

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and Redemption Division with salary at the rate of 0.200 per annum, reported

for duty on April 4th.

Noted, with approval.

Aeport of Committee on Salaries and Expenditures on list submitted by the

Federal Reserve Bank of St. Louis of employees for whom the directors of that

bank approved leaves of absence with pay, on account of illness, during the

111011th of March, where the total of such absences since January 1, 1929 has

exceeded thirty days; the Board's Committee recommending approval of the sal-

Payments involved.

Approved.

aeport of Committee on Examinations on letter dated April 3rd from the

l'ederal deserve Agent at Richmond, transmitting and recommending approval of

Ett application of the Peoples Trust Company of Martinsburg, W. Va., for ap-

Pr°val of its purchase of the Bank of Martinsburg, a non-member, on March

28th; the Board's Committee also recommending approval.

Noted, with approval.

The Assistant Secretary then reported that in accordance with the thstruc-

ti°43 Of the Board at its meeting on April 1st he communicated with all Federal

Iteaerve banks and ascertained that they are willing to assume their pro-rata

3haree of the fee and expenses of Honorable Newton D. Baker, who will repre-

eett the Federal Reserve Bank of New York in the appeal made by Frank G. Raichle

trora the decision of the United States District Court for the Southern District

Of i\T-ew York, granting a motion to dismiss the bill of complaint in his case

aaillst the Federal Reserve Bank of New York. He submitted draft of a letter

tothe - ,70vernor of the Federal Reserve Bank of New York advising accordingly.

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Noted, with approval.

aeport of Committee on Salaries and Expenditures and Committee on District

#121 submitting final plans and specifications for the construction of a build-

ing to house the Los Angeles Branch of the Federal Reserve Bank of San Fran-

cisco, together with a tabulation of bids, all of which have been approved by

the board of directors of the Federal Reserve Bank of San Francisco; the Oom-

Mittee recommending approval by the adoption of a resolution reading as fol-

26 „ "REAS, by Public Resolution No. 76, 70th Congress, approved January

1929, the Federal Reserve Bank of San Francisco was authorized by Con-

gress to enter into contracts for the erection of a building for its Los

'Aallgeles Branch on the site then owned, provided the total amount expended111 the erection of said building exclusive of the cost of vaults, perma-n,ent e quipment, furnishings, and fixtures, shall not exceed the sum of10800,000, and provided also that the character and type of building to be

?reeted, the amount actually to be expended in the construction of saidpuilding and the amount actually to be expended for the vaults, permanent

!quipment, furnishings and fixtures for said building shall be subject

40 the approval of the Federal Reserve Board;

WHEREAS, the Federal Reserve Bank of San Francisco has submitted to

Federal Reserve Board plans and specifications for the erection of aouilding for its Los Angeles Branch in accordance with the ,authority

granted by the said Public Resolution No. 76, 70th Congress, and has alsosalAbmitted bids and estimates for the construction of the said building

.,Elgregating the amount of cel,536,590.05 and these plans, specificationsond bids (including estimates), have been approved by the Board of Direct-s of the Federal Reserve Bank of San Francisco;

„ 71HEREAS, the said aggregate amount of 41,536,590.05 consists of (1);141e amount of 4753,845.73 which is to be expended for vaults, permanent

nquipment, furnishings and fixtures for said building, and (2) the amount

"f $1782,744.32 which is to be expended for the erection of the buildingProper;

7THEREAS, the amount of 4782,744.32, which is to be expended in thee'ection of said building exclusive of the cost of the vaults, permanent

mquipment, furnishings and fixtures is less than the sum of 4800,000, the

4XiMarn amount authorized by said Public Resolution No. 76, 70th Congress;

.7/HEREAS, in the opinion of the Federal Reserve Board the segregation

;' items entering into the cost of the building proper as distinguished

fr°m those entering into the cost of the vaults, permanent equipment,

burnishings and fixtures, as set out in the said specifications submitted

Y the Federal Reserve Bank of San Francisco, is correct in so far as iti

8 reasonably possible to determine;

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"THEREFORE, BE IT R2SOLVED, That (1) the said plans and specifica-

tions submitted by the Federal Reserve Bank of San Francisco, (2) the

amount of :0782,744.32 actually to be expended in the construction of

said building exclusive of the cost of the vaults, permanent equipment,

furnishings and fixtures, and (3) the amount of 4753,845.73, actuallyto be expended for the vaults, permanent equipment, furnishings and

fixtures, for said building be and they are hereby approved by the

Federal Reserve Board and the Federal Reserve Bank of San FranciscoIs therefore authorized to proceed with the erection of said building

In accordance with the plans and specifications and bids (includingestimates) herein approved; provided, however, that in the case of

those items entering into the cost of vaults, permanent equipment,furnishings and fixtures which are covered by estimates, rather than

bids, the final bids or actual expenditures shall subsequently be sub-

mitted to the Federal Reserve Board for approval."

After discussion, upon motion by Mr. James,

the above resolution was adopted.

Memorandum from the Assistant Secretary dated April 5th, recommending that

the Board, in accordance with a previous informal understanding, based upon an

agrement made between the Treasury Department and the Governors of the Federal

aeserve banks in conference, approve payment by the Federal Reserve banks of a

atatement by the Bureau of Engraving and Printing, in the amount of 4750,000,

"ring a part of the cost of Federal Reserve notes of the new size (Series of

1928) which are in process of printing and will be delivered by the Bureau dur-

114g the months of April, May and June, 1929.

The Governor presented the following letter received from the Assistant

Seoreta—of the Treasury:

"With reference to our recent talk, and to the bill presented by

the Bureau of Engraving and Printing for 4750,000 in part payment of

cost of producing Federal reserve notes this fiscal year, it may

?e pointed out that Federal reserve notes are produced on a repay basis,

lt being the usual procedure to reimburse the Bureau appropriations at

the end of each month to cover the notes completed and delivered during

that month. However, in the production of some 22,000,000 sheets of

reduced-size Federal reserve notes this fiscal year, it has not been

Possible to complete and deliver the new currency on a basis prorated

bY months, with the result that althoug more than 50 per cent of the

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"production costs for the year have been incurred, reimbursementin the usual manner has not been made because the currency hasnot reached completion. The account now submitted by the Bureauis less in amount than the expenditures actually made and chargedto the Bureau appropriations on account of this production.

The total production of Federal reserve notes this fiscalyear, all to be delivered before June 30 next, will approximate22,000,000 sheets, and the cost will exceed - 1,800,000."

After discussion, upon motion, it was voted todirect the Board's Fiscal Agent to levy the appro-priate assessment upon each Federal Reserve bankand to remit the aggregate amount of c1750,000 tothe Bureau of Engraving and Printing.

Drift of reply to letter dated April 1st from the President of the Peoples

8"iugs and Trust Company, Pittsburgh, Pa., inquiring whether the general con-

clit.ion of membership contained in the Board's Regulation "H", Series of 1928,

Which the Board declined to waive when the application of the Peoples Savings

44a Trust Company for membership in the System was approved on March 1st, ap-

Plies equally to all member banks, whether they joined the System before or

altst" the regulation in question was adopted; the proposed reply pointing out

thatthe particular condition of membership referred to applies only to those

etatebanks and trust companies which have been admitted to the Federal Reserve

ahteril Since January 3 1928, when Regulation "H", Series of 1928, became ef-

41"iIre but pointing out that conditions of membership of similar tenor were

441 a41-‘ to all state institutions which joined the System during the time the

441118 aegulation "H", Series of 1924, was effective and in specific cases to

ettaill member banks admitted prior to that time.

Upon motion, the proposed reply was

approved.

DEltea, April 3rd,Recommending changes in stock at Federal Reserve banks as

5th, set forth in the Auxiliary Minute Book of this date.Recommendations approved.

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Ae.taATs OF JTANDING COY.MITTEES: (Cont'd)

Dated,

Dated,

Dated,

April 3rd, Recommending action on applications for fiduciary powers

4th, as set forth in the Auxiliary Minute Book of this date.

Recommendations approved.April 3rd, Recommending action on applications for admission of state

banks, subject to the conditions stated in the individual

reports attached to the applications, as set forth in the

Auxiliary YAnute Book of this date.Recommendations approved.

April 1st, Recommending approval of the application of Lir. C. H.

Phinizy for permission to serve at the same time as di-

rector of the National Bank of Athens, Athens, Ga., and

as director and officer of the Georgia Railroad Bank,

Augusta, Ga.Approved.

The meeting adjourned at 4:00 o'clock p.m.

Assistant Secretary.

Approved:

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